Out of bankruptcy

Published 7:00 pm, Friday, April 2, 2004

DETROIT  A federal district judge Friday set June 1 as the day for Dow Corning Corp. to get out of bankruptcy over its silicone gel implants, paving the way for thousands of women to begin receiving settlement payments as early as June 15.

Judge Denise Page Hoods order means thousands of women who said Dow Corning silicone breast implants made them sick could receive checks from a $2.35 billion settlement fund that is part of Dow Cornings reorganization plan. Hoods order came about two weeks after 48 Nevada women dropped a challenge that had held up payments for years. Hood has scheduled what is expected to be a final hearing on April 29 in Detroit and wanted all issues resolved by that date, said Dow Corning spokeswoman Mary Lou Benecke.

"Were just kind of pinching ourselves over here  like, is this real?" Benecke said.

Dow Corning was forced into bankruptcy in 1995 after thousands of women sued the company, saying its implants damaged their health. In a settlement approved by a federal judge, Dow Corning agreed to pay qualifying claimants payments averaging $10,000 to $30,000, Benecke said. The smallest payments would be $2,000 and, in the most serious circumstances, about $300,000.

About 170,000 women who received breast implants have filed claims, and there are about 75,000 other claimants who had other kinds of silicone implants, including joint and facial implants. Those who have filed claims, the company said, include people who have become sick as well as those who think they could become ill in the future.

Dow Corning has maintained the implants do not cause disease, and a large body of scientific evidence has borne that out. In addition, Benecke said, there have been 22 court opinions that have found insufficient evidence that the implants cause disease.

The trust administering claims plans to start sending out settlement packets the week of June 1. People will use the forms to decide whether to settle their claims, withdraw or sue the Dow Corning litigation facility, an independent entity set up under the companys reorganization plan.

"This has been such a long time in coming," said Sybil Niden Goldrich, who sits on the committee representing those who filed claims. "Now theres nothing standing in the way for women to be getting money that they need very badly for their medical care to proceed."

A claimant herself, Goldrich had four sets of breast implants after a bilateral mastectomy.

After the Nevada women dropped their challenge, one set of issues remained. The committee representing Dow Cornings creditors disputed the interest rate Dow Corning would pay its creditors on any debts the company owed at the time it filed for Chapter 11. Much of that debt was purchased by financial institutions.

"Those institutions wanted an extremely high interest rate, not unlike an interest rate you would pay if you were in default on a loan," Benecke said.

Judge Hood denied the creditors appeal, she said.

How will this light at the end of the tunnel for Dow Corning change work life there? It means Dow Corning can take complete control of its business decisions when it emerges from Chapter 11.

"If we want to do anything, like a major capital investment, we need to ask permission of the court," she said.

Because the company is under protection from its creditors, business moves dont "happen on our timetable, and we need to justify them," she said.

Benecke praised company employees for holding up under the stigma of bankruptcy since 1995.

"Weve learned to live with it," she said. "Weve been able to do a very good business.

"They have been steadfast in the focus on serving customers and doing the jobs that they do best."